Harvard reports operating deficit amid federal funding cuts - Harvard Gazette

"With the release of Harvard University's fiscal year 2025 financial report, the Gazette sat down with Executive Vice President Meredith Weenick and Vice President for Finance and Chief Financial Officer Ritu Kalra to discuss the University's financial position amid evolving federal policy - from the termination and reinstatement of research funding to a forthcoming increase to the endowment tax. This interview has been edited for clarity and length."

"The termination of hundreds of research grants to Harvard did not occur in a vacuum. Heading into FY25, we were already contending with costs rising faster than our revenues, which, as we discussed last year, is not a sustainable path forward. The federal policy landscape began to change in early February, with proposals to cut contracted indirect cost reimbursement rates on active research and with terminations of dozens of individual awards affecting projects underway across our Schools."

Fiscal year 2025 brought major financial strain across Harvard, especially the research enterprise, amid evolving federal policy and a planned increase to the endowment tax. Costs were rising faster than revenues entering FY25. Federal proposals to cut contracted indirect cost reimbursement rates preceded terminations of dozens of awards, followed by abrupt termination of nearly the entire portfolio of direct federally sponsored research grants in spring. Approximately $116 million in sponsored funds, reimbursements for costs already incurred, disappeared almost overnight. The disruptions also heightened concerns for international students and scholars and amplified the need to address unsustainable cost-revenue dynamics.

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